How to Redeem Mutual Funds
Redeeming mutual funds means selling your mutual fund units back to the AMC (Asset Management Company) at the current NAV and receiving cash in your bank account. The process is straightforward and fully digital in India. Most open-ended mutual fund redemptions are processed within 1-3 business days, with proceeds credited directly to your registered bank account.
Ways to Redeem Mutual Funds in India
- AMC website or app: Log in to the AMC's portal (e.g., SBI MF, HDFC MF), go to your folio, select the fund, and place a redemption request.
- MF Central: mfcentral.com is a unified platform from SEBI where you can redeem from any AMC after OTP verification.
- Broker/platform app: If you invested via Groww, Zerodha, Paytm Money, etc., redeem from within the same app.
- CAMS/KFintech portals: Online RTAs also accept redemption requests for all AMCs they service.
Redemption Process and Timeline
| Fund Type | Applicable NAV | Credit Timeline |
|---|---|---|
| Equity fund (before 3 PM) | Same day NAV | T+3 business days |
| Equity fund (after 3 PM) | Next business day NAV | T+4 business days |
| Debt fund (before 3 PM) | Same day NAV | T+2 business days |
| Liquid fund (before 3 PM) | Same day NAV | T+1 business day (next day) |
Things to Check Before Redeeming
- Exit load: Redeeming within the exit load period (typically 1 year for equity funds) incurs a fee. Check before redeeming.
- Tax implications: Redemption triggers a capital gains tax event. Know your gain and tax liability before redeeming.
- Lock-in status: ELSS funds have a 3-year mandatory lock-in. You cannot redeem before the lock-in expires for each instalment.
- Registered bank account: Redemption proceeds go only to the bank account registered with the AMC/folio.
Partial Redemption
You can redeem a specific amount (partial redemption) rather than your entire investment. The AMC calculates how many units to sell at the current NAV to give you the requested amount. Partial redemptions are common for goal-based withdrawals, such as withdrawing from a liquid fund for an emergency expense while keeping the rest invested.
Key Takeaway
Mutual fund redemption in India is quick, digital, and typically completed within 1-3 business days. Always check exit load, tax liability, and lock-in status before placing a redemption request. Use the Lemonn app to track your mutual fund portfolio, calculate potential gains and tax, and plan your redemptions strategically.
